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Private investor buys high performing Woolworths centre for $26 million

Wadalba Woolworths sold for $26.15 million on a 5.69% yield to a high-net-worth Victorian investor

Colliers international have confirmed the sale of a brand-new, high performing freestanding supermarket investment on behalf of its client Woolworths Group. This sale represents the first recorded NSW retail transaction to be unconditionally exchanged in the current climate, highlighting the continued market strength for supermarket investment opportunities.

Woolworths Wadalba, located in one of NSW’s growth corridors between Newcastle and Gosford on the NSW Central Coast, sold for $26.15 million on a 5.69% yield to a high-net-worth Victorian investor.

Woolworths Group Limited offered four retail investment assets for sale earlier this year, to be sold individually by separate agents.

James Wilson and Alex James-Elliott of Colliers International, facilitated the sale of the 3,905m2 Wadalba centre, anchored by a Woolworths Supermarket and BWS, that occupies a prominent 1.55 hectare corner site on the Pacific Highway in Wadalba, a rapidly growing region of NSW, less than 100km from the Sydney CBD.

“The current market is evolving quickly, and we are seeing a high level of interest in quality non-discretionary anchored assets by sophisticated high net worth investors. As such, Woolworths Wadalba experienced a high level of enquiry upon the formal launch of the campaign, with strong levels of activity across the data room and inspections,” said Wilson.

“As the campaign continued, we experienced an increase in interest from long-term generational investors who pursued this asset type, due to its stable and secure characteristics and ability to both protect and grow wealth.”

“The market is anticipating limited high-quality supermarket investment opportunities in the short to medium term; resulting in strong bidding from a large number of qualified high net worth investors”.

Alex James Elliot, Executive, Retail Investment Services, said, “Purchasers have noted that the key difference between this market and the GFC, is that the gearing levels are far more sustainable and there are plenty of purchasers who are looking to take advantage of the market conditions.”

“We attribute this heightened investor interest in the supermarket asset class due to their sustained essential role in Australia’s food supply during these uncertain times. This strength has been demonstrated throughout the Woolworths Wadalba campaign which has been seen as a secure investment underpinned by the long-term lease associated with the centre and Woolworths Group respectively. Centres anchored by supermarkets will continue to thrive throughout these uncertain times due to the dependence from the public on these stable establishments.”

The campaigns Colliers International facilitated throughout 2019 found that strong levels of investor competition was experienced from sophisticated domestic and offshore sources of capital.

During 2019, NSW recorded 10 sales of supermarket and freestanding retail investments totalling $134 million in value, a 25% increase in the number of transactions recorded from the previous year.

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